An alternative capital reinsurance transaction has been completed between Axa XL Reinsurance in Bermuda, and Bluefire Insurance, a Texas-based managing general agency.

As a result, Bluefire will assume risk from its personal auto portfolio through a collateralised reinsurance agreement with Axa XL.

Axa XL and Bluefire’s partnership dates back to 2014, and strengthened in 2019 when Bluefire consolidated its carrier assortment and moved its reinsurance buying to a portfolio basis. The transaction represents Bluefire’s first risk taking position on its business, and the first personal auto alternative capital transaction that Axa XL has completed in Bermuda.

Jamie Pooley, head of strategy at Bluefire Insurance, said: “Bluefire has a diverse and stable book of business with significant scale that is delivering consistent and predictable returns to our reinsurance partners.

“We have been exploring ways to reinsure our own business for some time but casualty quota share reinsurance agreements have an exposure duration which presents capital efficiency challenges. Once we explained our intent to take risk with the team at Axa XL, we collaborated to design a bespoke structure that met both parties’ objectives. We are delighted to have expanded and further aligned our relationship with Axa XL while creating a capital efficient mechanism that captures the results we are producing.”

While Paul Simons, head of property, global markets and head of Bermuda reinsurance at Axa XL, said: “Axa XL Reinsurance is pleased to partner with Bluefire on this transaction. As a leading global reinsurer with experience in both the traditional and alternative capital markets, we offer customised, innovative solutions across a broad product offering.

“While most of our alternative capital solutions have been in the property catastrophe space, this transaction demonstrates our willingness and ability to provide alternative offerings in casualty and other lines of business.”

Axa XL were advised by Walkers Bermuda on the transaction. Bluefire were advised by Foley & Lardner LLP. Bluefire’s segregated cell “Bluefire ACR” is managed by Quest Group, Bermuda and is housed inside RQIH, a Bermuda segregated account company.